Following us Exclusive FNG report last month that Australian police raided the offices of ASIC-licensed Retail FX and CFDs broker Prospero Markets as part of a wider crackdown on a China-based money laundering ring, Australia’s financial regulator ASIC said that it has now suspended the company’s Australian Financial Services (AFS) Licence.
Prospero Markets is an Australian based broker serving mainly Chinese speaking clients in both Australia and the Far East.
Prospero Markets Pty Ltd has also given an undertaking to the regulator that it will not deal in client funds without ASIC’s agreement.
Prospero’s license suspension means it cannot provide financial services during the suspension period from December 20, 2023 to February 28, 2024.
It is interesting that in in explaining its decision ASIC made no reference of the police raid or arrest of Prospero shareholder and CEO Ding (Dean) Wang at the time. Instead, the regulator said that following an administrative hearing, ASIC found that Prospero Markets had failed to submit its annual financial statement and audit report for the financial year ended 30 June 2023 within the prescribed time frame and in compliance under the AFS license terms.
ASIC added that if Prospero fails to file its annual financial statement and audit report for the financial year ending 30 June 2023 during the suspension period, ASIC will consider whether the license should be suspended for a further period or to be cancelled.
On 16 November 2023, ASIC also opened an investigation into suspected breaches of the Companies Act 2001 by Prospero in the period from 1 March 2021.
On 19 December 2023, Prospero Markets agreed to ASIC’s request that Prospero provide an undertaking to ASIC that it will not deal in client funds without ASIC’s permission. The freeze will remain in place until at least 8 February 2024 to give ASIC time to investigate its concerns. The regulator added that Prospero Markets is assisting ASIC in its investigation. Prospero may also apply to the Administrative Appeals Tribunal for a review of ASIC’s decision to suspend the AFS licence.
Arrests for money laundering
In an earlier article from late November, we reported that the Australian Federal Police (AFP) had arrested seven members of an alleged Chinese organized crime syndicate, accusing them of secretly running a prominent multibillion-dollar money-laundering ring in Australia. in what the AFP called “the most complex AFP-led money laundering investigation” in the nation’s history.
The arrests surrounded a nationwide chain of currency exchange shops called Changjiang Currency Exchange, which AFP alleges is secretly run by the Long River money laundering syndicate from China. The syndicate and the Changjiang foreign exchange are accused of laundering $229 million in proceeds of crime over the past three years.
Those arrested reportedly included Ding (Dean) Wang, who is listed as the sole director of CJ Prime Financial, the ultimate holding company of Prospero Markets, and the alleged controlling shareholder of Prospero Markets. And it turns out that the offices of Prospero Markets were among those locations raided by the AFP in late October. Prospero Markets’ bank accounts were also frozen at the time.
While AFP did not specifically mention Prospero Markets in its initial press release announcing the arrests, nor did it officially link the Changjiang currency exchange to Prospero Markets, Australian news site The Australian reported that some of those arrested (besides Ding Wang) also have links to Prospero Markets. The Australian she also reported that a source informed her that it is “common knowledge” in the Chinese community in Australia that Changjiang Currency Exchange and Prospero Markets were run by the same people.
After the AFP raid, we reported that customers of Prospero Markets were sent an email from the firm that said:
“We regret to inform you that Prospero Markets bank accounts, including but not limited to Client Money bank accounts, have been frozen by the banks.
“We are in the process of communicating with the relevant banks to have these accounts released.
“As a result, we have been unable to process your deposits and withdrawals, as well as other required transactions on these accounts, since October 25th.
“We are working to fix this as quickly as possible.”
We will continue to follow this story as it develops.